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On Form 1099-DIV, a nondividend distribution will be shown in box 3 and generally is not taxable.
If you do not receive such a statement, you report the distribution as an ordinary dividend. A nondividend distribution reduces the basis of your stock.
All dividends must be declared by the board of directors, and they are taxable as income to the recipients.
Long-term investors who want to maximize their gains should consider reinvesting their dividends.
Most brokers offer a choice to reinvest or take cash dividends.
When the basis of your stock has been reduced to zero, report any additional nondividend distribution you receive as a capital gain on Schedule D.
Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock.